Taking Advantage of the Surge in Seattle Foreclosures

by Donald Hanz on cities

Investors and owner occupant buyers are taking advantage of the surge in Seattle foreclosures.

Seattle, the home of Microsoft and Boeing, was largely insulated when the housing crisis hit in 2008 and 2009 because of its vaunted economic strength. But as the economic crisis deepened, unemployment crept into the city and caused a surge of bankruptcy houses and foreclosure homes for sale.

The increase in foreclosures can be reflected in the number of people gathering outside the King County office building in Seattle every Friday. Investors, owner occupant buyers and observers gather and see what bargains they can snap up during the bidding held by the trustees.

One company that has been winning bids for clients said the number of houses being auctioned off in King County has been rising over the past few months. It expected the number of units to double to about 800 units in June from around 400 units in May.

With the increase in Seattle foreclosures, investors can take advantage of the opportunity of buying lower-priced homes in the area. In normal times, most homes are priced above the half-million-dollar range. But as the number of distressed properties grows, foreclosed homes in the $350,000 range can now be seen.

On one online site, there is a two-bedroom home priced at $365,773, but the difficulties of the times even in high-cost neighborhoods are now highlighted as there are now a lot of foreclosures priced above $1 million.

Government foreclosures have also been rising in the Seattle metro area, as VA, Fannie Mae, Freddie Mac and HUD foreclosures continue to get added to real estate listings. As these agencies continue to grab a greater portion of the mortgage market, they also continue to get hit with a sharply rising number of defaults and foreclosures.

While in the past, new homes and existing homes dominated the Seattle market, now foreclosed houses have been accounting for the majority of homes for sale. One major online real estate seller has 2,267 Seattle foreclosures on its website.